The Affordable Care Act: Opportunities for States in 2013

1. The Affordable Care Act: Opportunities for States in 2013 Robert Greenwald , Maggie Morgan and Emily Broad Leib, Center for Health Law and Policy Innovation of Harvard Law School February 2013

2. PRESENTATION OUTLINE • Part 1: The Affordable Care Act: Overview of Where We Are and Where We Are Going • Part 2: Medicaid Expansion: a Key National Advocacy Priority • Part 3: Medicaid Chronic Health Homes: A Model for Diabetes • Part 4: Medicaid Preventive Services: Essential Care without Cost-Sharing

3. Part 1: The Affordable Care Act:Overview of Where We Are & Were We Are Going

4. Where We Are:Status Quo = Access to Care Crisis

5. U.S.. Rates of Uninsured:We are Moving in the Wrong Direction See: http://www.gallup.com/poll/156851/uninsured-rate-stable-across-states-far-2012.aspx?version=print

6. High Rates of Uninsured Across the Nation & Particularly in the South TX

7. WHERE WE ARE GOING: ACA Reforms Private Insurance and Reduces Discriminatory Insurance Practices • Cannot be denied insurance because of diabetes or other health condition, even if you don’t currently have coverage (2014) • Health plans cannot drop people from coverage when they get sick (in effect) • Nolifetime limits on coverage (in effect) • No annual limits on coverage (2014)

8. ACA Promotes Access to Subsidized Private Insurance through Exchanges in 2014 • Consumer-friendly Exchanges to purchase insurance • As of February 15, 2013, 18 states and the District of Columbia have decided to establish a State-based Exchange (SBE), and another seven states have chosen a Partnership Exchange. The remaining 26 states have defaulted to an exchange run by the federal government. • Federal subsidies with income between 100-400% FPL • (Up to ~$44K for an individual/~$92K for family of four) • Plans cannot charge higher premiums based on health status or gender • Plans must include Essential Health Benefits

9. Status of State-Based Exchanges

10. ACA Benefits Also Include an Essential Health Benefits Package ACA Essential Health Benefits For All Newly Eligible Medicaid Beneficiaries • Ambulatory services • Emergency services • Hospitalization • Maternity/newborn care • Mental health and substance use disorder services • Prescription drugs • Rehabilitative and habilitative services • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services For Most New Individual and Small Group Private Insurance Beneficiaries

11. ACA Increases Access to Medicare Drug Coverage & Preventive Services • Part D “donut hole” phased-out by 2020 • 50% discount on all brand-name prescription drugs • Free preventive services • Among others, for adults, includes mammograms, colonoscopies and other cancer screenings, diabetes screenings, counseling for tobacco use and certain types of pre-natal care. Treatments for the prevention of alcohol abuse, depression and obesity.

12. ACA Expands and Improves Medicaid in 2014 • Expands Eligibility to Medicaid by eliminating the disability requirement for those with income up to 138% FPL (~$15K for an indiv/~$32K for family of four) • Every low-income U.S. citizen and legal immigrant (after 5 years in U.S.) is now automatically eligible • Based on Supreme Court decision federal government can’t withhold all federal Medicaid funds if states refuse to implement Medicaid expansion Medicaid expansion is optional and will be decided state-by-state

13. ACA Includes Other Medicaid Improvements: Supports Primary Care Providers, Medicaid Health Homes, and Free Preventive Services • Improves reimbursement rates for primary care providers (up to Medicare reimbursement rate) for 2013 and 2014 • Gives states the option to provide cost-effective, coordinated and enhanced care and services to people living with chronic medical conditions through Medicaid Health Home Program • Gives state the option to provide free preventive services, including diabetes screening and treatment for the prevention of obesity

14. Where We Are Going: Great Potential but Relies on Successful Implementation Improves Medicaid: Expands eligibility (state option); provides essential health benefits (EHB) (federal and state regulations); improves reimbursement for PCPs (only 2013-14); includes health home (state option); free preventive services (state option for Medicaid) Creates Private Insurance Exchanges: Provides subsidies up to 400% FPL (federal and state regulation); eliminates premiums based on health/gender; provides EHB (federal and state regulation); supports outreach, patient navigation and enrollment (federal and state regulation) Only with Successful Medicaid Expansion Will We Dramatically Improve Health Outcomes, Address Disparities, and Meet Prevention Goals

15. Part 2: Medicaid Expansion: A Key National Advocacy Priority

16. ACA Will Dramatically Decrease Uninsured Rates By Requiring Everyone to Have Health Insurance The area in red is the Texas Medicaid expansion population The area in blue is the Texas subsidized insurance population Source: Texas Health and Human Service Commission: http://www.hhsc.state.tx.us/news/presentations/2012/071212-ACA-Presentation.pdf

17. ACA Implementation with Medicaid Expansion =Income-Based Early and Comprehensive Health Care Coverage Rice University research estimates that up to 4.4 million out of 6 million currently uninsured Texans will obtain insurance, with Texas seeing the largest gain in insurance coverage in the country with only 5.8% of Texans remaining uninsured. ACA Implementation Texas HHSC estimates that ACA Implementation with Medicaid expansion would provide health care to 2.6 million of the 5.5 million uninsured people in Texas. Source: http://library.cppp.org/files/3/HC_2012_06_BR_MHMClineMurdock.pdf Texas HHSC, Pink Book 2013 (http://www.hhsc.state.tx.us/medicaid/reports/PB9/PinkBook.pdf)

18. Current Medicaid Program = Disability (Not a Health Care) Program for Low-income Uninsured % of Medicaid Expenditures by Type of Service Waiting for people to be disabled before providing access to care is not sustainable Source: Kaiser Family Foundation. Analysis of 2007 MSIS data provided by the Urban Institute (http://www.kff.org/hivaids/upload/8218.pdf)

19. Medicaid Expansion Is a New and Different Program As Chief Justice Roberts stated in the ACA decision: “Congress’s decision as to title is irrelevant… The Medicaid expansion, accomplishes a shift in kind, not merely degree.“ It isn’t a disability program. It is a prevention-based early access to affordable health care program.

20. High Rates of Uninsured Are a Vicious Cycle Forcing More People to Drop Coverage Source: Texas Medical Association. http://www.texmed.org/Uninsured_in_Texas/

21. Early Access to Comprehensive Health Care Matters • Improves overall physical, social and mental health status • Prevents disease and disability • Leads to detection and treatment of health conditions • Improves quality of life • Reduces preventable death • Increases life expectancy Uninsured people are less likely to receive medical care, more likely to have poor health status, and more likely to die early See: http://www.healthypeople.gov/2020/default.aspx

22. Having an Ongoing Source of Care Matters • People with a usual source of care have better health outcomes, and fewer disparities and costs • Having a usual primary care provider increases the likelihood that patients will receive appropriate care • Access to evidence-based preventive services prevents illness by detecting early warning signs or symptoms before they develop into a disease and detects disease at an earlier, and often more treatable, stage See: http://www.healthypeople.gov/2020/default.aspx

23. Early Intervention Is Cost-Effective and Improves Individual and Public Health Outcomes for People Living with Diabetes and other Chronic Conditions • Many interventions intended to prevent/control diabetes are cost saving or very cost-effective * • i.e., regular preventive care, proper use of insulin or oral medication, and supported self- management can reduce the risk of diabetes complications • Clinical trial evidence has shown convincingly that pharmacological treatment of risk factors can prevent heart attacks and strokes** • Early intervention treatment for mental illness does not increase costs and is highly cost-effective when compared with standard care*** * Li Rui, et. al., Cost-Effectiveness of Interventions to Prevent and Control Diabetes Mellitus: A Systematic Review, 2010; ** William Weintraub, Value of Promordial and Primary Prevention for Cardiovascular Disease, 2011; *** Paul McCrone, Cost-effectiveness of an early intervention service for people with psychosis, 2010

24. Expanding Medicaid Will Provide a Lifeline to Uninsured Diabetics Because of traditional Medicaid’s restrictive eligibility requirements, many uninsured people with type 2 diabetes are not receiving the care they need to manage the disease and prevent complications • Nearly half of uninsured adults with diabetes are undiagnosed • Low-income adults with diabetes who are not currently eligible for Medicaid enter care late, are often experiencing advanced disease progression, and incur high costs related to preventable conditions Source: Health Affairs

25. Medicaid Can Be An Even More Critical Source of Care for Low-Income People with Diabetes with Expansion Medicaid beneficiaries with diabetes have much easier access to vital care than diabetics without insurance • Uninsured adults with diabetes are more than 3 times as likely to report being unable to get needed care & more than 5 times as likely to delay needed care as diabetics on Medicaid • Uninsured adults with diabetes report high rates of problems acquiring necessary prescription drugs Source: Health Affairs

26. Federal and State Policy Making Matters Average per capita health spending % of GDP In all other industrialized democratic countries every citizen is guaranteed access to health care yet they spend less

27. Medicaid Expansion is Not Just for the Unemployed: Low-Wage Workers and Small Business Owners are Increasingly Uninsured “Small Businesses Hit Hard by Economy Consider Dropping Health Coverage,” New York Times, Feb 3, 2009.

28. Expanding Medicaid Helps State Hospitals: Either Way Federal Support of Uncompensated Care Declining • In addition to individual and public health related cost savings, Medicaid expansion will dramatically reduce federal and state uncompensated care costs • If a state doesn’t expand Medicaid, costs will increase, as the federal government is reducing funding to cover uncompensated care in favor of funding Medicaid expansion Source: Milliman ACA Impact Analysis , December 2012

29. ACA Will Reverse The Trend of Fewer Medicaid Providers: Greatly Increasing Access to Cost-Effective Primary Care

30. The Medicaid Expansion Will Have A Multiplier Effect on the Economy With $120 billion in funding over the first 10 years of Medicaid expansion implementation, economic gains will include: ~ $276 Billion in general business activity ~ Over 300,000 new jobs Based on best estimates: Fast Facts on Texas Hospitals, THA, 2012-2013

31. Medicaid Expansion: Where the States Are

32. Medicaid Expansion Is Increasingly Non-Partisan and Being Assessed on Its Merits Conservative Republican Governors are starting to see Medicaid Expansion as cost saving and a great deal for their states Medicaid expansion greatly reduces state mental health services burden - Nevada anticipates saving $16 million in just 2 years on mental health and predicts the state would spend and extra $16 million without expansion. Governor Sandoval, Nevada Federal funds from Medicaid expansion boost state economies and will protect rural and safety net hospitals from being pushed to the brink - Arizona estimates saving $353 million in just 3 years. Governor Brewer, Arizona It comes down to are you going to allow your people to have additional Medicaid money that comes at no cost to us, or aren't you? We're thinking, yes, we should. Governor Dalrymple, North Dakota Medicaid expansion will not only save money each year, we can expect revenue increases that will offset the cost of providing these services in the future. Governor Martinez, New Mexico

33. The Final Challenge If a state doesn’t expand Medicaid, its citizens’ federal tax dollars will instead go to fund health care in states that do, like NY and CA!

34. Part 3: Chronic Health Homes: A Model for Diabetes Care

35. People on Medicaid are Much More Likely to Have Diabetes As of 2008, 1 in 10 low-income adults on Medicaid were diagnosed with diabetes compared to 1 in 20 low-income, uninsured adults • 82% of these beneficiaries have at least one additional chronic condition This is incredibly high comorbidity—requiring an immediate and comprehensive approach to chronic health care. Sources: National Academy for State Health Policy; Kaiser Family Foundation

36. People with Chronic Illness Account for a Large Proportion of Medicaid Spending More than 9 million Medicaid recipients qualify because of a disability and 45% of these have 3 or more chronic conditions: • Treating patients with multiple chronic conditions costs up to 7 times as much as patients with only one. In fact, just 5% of Medicaid enrollees account for almost 50% of total health care spending States need a way to contain costs while still providing quality treatment. Sources: National Academy for State Health Policy; Kaiser Family Foundation

37. The Current System for Treating Diabetes is Falling Short! Few patients meet the evidence-based recommendations for proper care • Only 7% of patients in one study met the recommendations for A1C, blood pressure, and LDL cholesterol • Nearly 90 percent of U.S. adults with diabetes—more than 16 million adults aged 35 and older —do not receive proper treatment for blood sugar, blood pressure and cholesterol • Racial, cultural and ethnic disparities, limited literacy, and poor self-management among affected populations are also persistent barriers to effective diabetes care Source: Gabbay RA, et al "Multipayer patient-centered medical home implementation guided by the chronic care model" Joint Comm J Quality Patient Safety 2011; 37(6): 265-273

38. A Promising Model: Patient Centered Medical Homes “People with diabetes should receive medical care from a physician-coordinated team. Such teams may include, but are not limited to, physicians, nurse practitioners, physician’s assistants, nurses, dietitians, pharmacists, and mental health professionals with expertise and a special interest in diabetes. It is essential in this collaborative and integrated team approach that individuals with diabetes assume an active role in their care.” American Diabetes Association, Standards of Medical Care in Diabetes

39. Characteristics of a Medical Home Model Coordination and integration of whole person care • Each patient has a personal physician who arranges care with subspecialists and consultants, and oversees and coordinates the team • Exchange of health-related information through electronic health records; patient registries; care coordinator services • Comprehensive care including preventive and end-of-life care Enhanced access • Flexible scheduling system; easy access to members of the team Quality and safety • Decision support based on updated practice guidelines Payment • Quality-based payment and sharing of savings achieved from reduced care costs; reimbursement for care coordination; recognition of complexity and severity of illness Taken from “Joint Principles of Patient-Centered Medical Homes, American Academy of Family Physicians; the American Academy of Pediatrics; the American College of Physicians; and the American Osteopathic Association.

40. Benefits of Medical Home Approach for Diabetes Many programs have demonstrated that patient centered medical homes (PCMHs) can improve diabetes outcomes and lower costs A recent study by Penn State researchers found : • A rise in yearly foot assessments for neuropathy from 50% to 69% • More yearly screenings for nephropathy and diabetic retinopathy • Increase in pneumonia and flu shots over baseline • Providers used more therapies shown to lower morbidity/mortality • Patients on statins jumped from 36% to 57%; those on an ACE inhibitor or an angiotensin receptor blocker rose from 42% to 56% • Improvements in key clinical parameters such as blood pressure and cholesterol GabbayRA, et al "Multipayer patient-centered medical home implementation guided by the chronic care model" Joint Comm J Quality Patient Safety 2011; 37(6): 265-273

41. The ACA Health Home Option (Section 2703 of the ACA) • The Affordable Care Act authorizes a new state option in the Medicaid program to implement health homes for individuals with chronic conditions • This model builds on the PCMH models already implemented in many states to focus specifically on people living with chronic conditions • Development of health homes can help states: - Improve care for people with chronic conditions - Restrain growth in Medicaid costs

42. Medical Homes vs. Health Homes Similar goals but a few important differences: • Unlike PCMHs, Health Homes must coordinate with behavioral health providers • Health Homes are required to help enrollees obtain non-medical supports and services(e.g. public benefits, housing, transportation) • Health Homes can move coordination beyond primary care Health Homes offer flexibility to address the specific needs of the chronically ill

43. States’ Move Towards Health Homes As of 2/15/13, 8 States have had their Health Homes SPAs approved by CMS: • Missouri (2 SPAs approved 10/20/11 and 12/22/11) • Rhode Island (2 SPAs; approved 11/23/2011) • New York (approved 2/3/12) • Oregon (approved 3/13/12) • North Carolina (approved 5/24/12) • Iowa (approved 6/8/12) • Ohio (approved 9/17/12) • Idaho (approved 11/21/12)

44. What services are included in the ACA Health Home Option? • Comprehensive care management • Care coordination • Health promotion • Comprehensive transitional care/follow-up • Patient & family support • Referral to community & social support services

45. Who is eligible for a Health Home? Medicaid Beneficiaries who: • Have 2 or more chronic conditions • Have one chronic condition and are at risk for a second • Have one serious and persistent mental health condition Chronic conditions listed in the ACA: mental health, substance abuse, asthma, diabetes, heart disease, and being over weight.

46. What are the Financial Benefits to States? • 90% FMAP for health home services for the first two years • After 2 years match rate reverts to the state’s normal FMAP • Enhanced match applies only to the specific health home services (e.g. care coordination) listed in the statute • A state may receive more than one period of enhanced match, but will only be allowed to claim the enhanced match for a total of 8 quarters for one beneficiary • States are also eligible for up to $500,000 in planning funds to explore the feasibility of creating health homes

47. States Have Considerable Flexibility to Design Their Own Health Homes States can determine their own • Population • Providers • Payment

48. Selection of Health Home Population • States determine which chronic conditions to cover • Most have adopted the chronic conditions listed in the ACA -including mental health, substance abuse, asthma, diabetes, heart disease and being overweight • NC and MO consider certain diagnoses such as diabetes to place a person at risk for other qualifying conditions. • States can also target individuals with chronic conditions outside the ACA list with CMS’ approval • Oregon includes people with HIV, cancer and Hepatitis C • Can be limited to certain acuity levels/ those with more severe conditions • Can be limited to specific geographic areas, but all states have chosen to implement statewide

49. Selection of Health Home Providers • Designated provider • May be a physician, clinical/group practice, rural health clinic, community health center, community mental health center, home health agency, pediatrician, OB/GYN, or other provider • A team of health professionals operating w/ desig. provider • May include physicians, nurse care coordinators, nutritionists, social workers, behavioral health professionals, or others • Can be free-standing, virtual, hospital-based, or a community mental health center or another appropriate setting • Health team • Must include medical specialists, nurses, pharmacists, nutritionists, dieticians, social workers, behavioral health providers, chiropractic, licensed complementary and alternative practitioners

50. Design of Payment Methods Payment methodologies: • Monthly management care fee (most states) • Can vary based on the severity of a person’s condition or the capabilities of health home provider • Fee-for-service • State may propose alternative approach